CHINA: Bond Futures Period of Stability Continues

Earlier USD gains haven't been sustained, with the G10 currencies supported on dips so far today versus the USD. The BBDXY index was last near 1214, down around 0.15% for the session, but still above intra-session lows from Monday (near 1212). 

• There hasn't bene an obvious catalyst for this turnaround in USD sentiment since this morning. US equity futures are still positive, albeit off earlier highs. Regional equity sentiment is mixed, but outperforming Monday's cash US falls (so hinting at further US asset market underperformance). US Tsy yields are little changed in latest dealings.
• Yen is the strongest performing G10 currency, with USD/JPY finding selling interest above 141.00. We track near 140.15/20 now, up 0.50% in yen terms. This is fresh lows in the pair back to September last year. Sep 16 lows from that period were at 139.58.
• EUR/USD is back up to 1.1535/40, just short of recent highs (1.1573). USD/CHF is back under 0.8100 but little changed for the session.
• AUD/USD is near 0.6430/35, eyeing Monday highs close to 0.6440, while NZD/USD is up to 0.6015/20. 

AUDUSD approached 64c earlier in the APAC session but rebounded following a higher CNY fixing. The pair is now up 0.2% to 0.6427, close to the intraday high and just below resistance at 0.6428. Risk appetite appears to have stabilised with mixed equity and commodity prices, which is probably contributing to the narrow range in AUDUSD. After falling 0.7% yesterday, the USD index is flat but off today’s peak. 

• Aussie is little changed against other major currencies, which it weakened against on Monday. AUDNZD is slightly higher at 1.0697 following a peak of 1.0706. AUDJPY is down 0.1% to 90.30 after rising to 90.58. AUDEUR is up 0.1% to 0.5579 but off today’s high of 0.5588 and AUDGBP is flat at 0.4796 after breaking above 0.4800 briefly.
• Equities are mixed with the S&P e-mini up 0.6% and KOSPI +0.1%, ASX & CSI 300 flat, but Hang Seng down 0.5% & TAIEX -0.8%. Oil prices are higher with WTI +0.7% to $62.85/bbl. Copper is up 0.6% but iron ore is below $99/t.
• Later the Fed’s Jefferson, Harker, Kashkari, Barkin and Kugler appear with the focus likely to be on any comments related to central bank independence. April Philly/Richmond Fed indices and preliminary April euro area consumer confidence print. The ECB’s de Guindos speaks.

ACGBs (YM +5.0 & XM flat) are mixed but sitting near Sydney session highs as trading resumes after the Easter weekend. The local calendar has been light today ahead of S&P Global PMIs tomorrow. 

• Cash US tsys are slightly mixed, with a flattening bias, in today's Asia-Pac session after yesterday's long-end sell-off.
• Cash ACGBs are 2-7 bps richer with the AU-US 10-year yield differential at -14 bps.
• Swap rates are 1-5 bps lower, with the 3s10s curve steeper.
• The bills strip has bull-flattened, with pricing +1 to +5.
• RBA-dated OIS pricing is 1-8 bps softer across meetings today. A 50bp rate cut in May is given a 24% probability, with a cumulative 122bps of easing priced by year-end (based on an effective cash rate of 4.09%).
• The AOFM plans to sell A$1000mn of the 3.25% 21 April 2029 bond tomorrow.